UAW could consider major shift in compensation from automakers
U.S. automakers may seek to start providing as much as 15 percent of union workers’ compensation in performance bonuses and lump-sum payments, emulating how their Japanese counterparts and salaried employees are paid, Bloomberg reported.
General Motors Co., Ford Motor Co. and Chrysler Group LLC may try to avoid granting annual raises to their 107,000 hourly employees as they negotiate new contracts with the United Auto Workers (UAW) this year, said Sean McAlinden, chief economist for the Center for Automotive Research. Instead, the companies may offer bonuses totaling as much as $10,000 a year that would partially depend on meeting productivity and quality goals.
UAW President Bob King, who convenes the union’s bargaining convention today in Detroit, has said he is open to new forms of profit sharing. If workers agree to put more of their pay at risk, it could mark the biggest shift in compensation practices since former UAW President Walter Reuther won wage guarantees for laid-off autoworkers in the 1950s.
The UAW’s four-year agreements with GM, Ford and Chrysler expire in September. More than 1,200 union leaders will discuss bargaining strategy during the Detroit conference. Union officials have said their members should recover concessions they have made since 2005 to help the automakers survive.